What is CAA's Role in AXS?

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Right up front in the Jan. 18 announcement that American Idol host and producer Ryan Seacrest is partnering with billionaire Mark Cuban and events giant AEG to rebrand Cuban's HDNet as a new television network called AXS (pronounced "Access") was a bit of surprising news: CAA, Seacrest's talent agency, would serve as an equity investor and "joint venturer" in the deal. The arrangement prompted some head-scratching in Hollywood because agents traditionally have been barred by actor guilds from owning entertainment producers and distributors due to concerns about conflicts of interest. But sources say CAA, which took a small stake in the network in exchange for an unspecified investment and a role as consultants with expertise in such areas as branding and digital content strategies, was careful in crafting its deal. Under AFTRA guidelines, an agency can own up to 20 percent of a producer, and a source says CAA's investment is well below that amount. And it's not the first time an agency has helped get a client's new business off the ground. WME predecessor Endeavor initially helped finance film/television producer Media Rights Capital, and CAA incubated client Will Ferrell's Funny or Die digital content outlet and the upstart celebrity social media service WhoSay.com. Says one outside observer, "The jury's still out on whether this is a smart deal, but it looks like everything is kosher."